Xylem Inc

At Xylem, sustainability is at the center of who we are and what we do. As a leading global water technology company, we address one of the world’s most urgent sustainability challenges – responsible stewardship of our shared water resources. Technology is playing an increasingly important role in helping the world solve water issues. We have a long history of innovation and are focused on the powerful capabilities of smart technology, integrated management and data analytics.

Our Board of Directors, primarily through its Nominating & Governance Committee, provides oversight of the Company’s approach to sustainability and corporate social responsibility. In addition, the LDCC oversees the Company’s approach to talent management and development, including how the Company advances diversity, equity and inclusion. The Board and its committees regularly discuss with management our approach to sustainability, including risks and opportunities, implications for the Company’s strategy our progress in meeting our sustainability-related commitments and our sustainability reporting.

Serving Our Customers We provide innovative technologies, solutions and expertise that help our customers solve major water challenges like water affordability, scarcity and resilience. Building a Sustainable Company We know that in order to be a company that advances sustainability, we have to be a company with a strong foundation that executes with discipline today while also focusing on the future. We adhere to and champion responsible business practices, including promoting diversity and inclusion, and look to be a standard-setter in all that we do. Empowering Communities We are a company that is committed to creating both economic and social value. We strive every day to create social impact and solve water for communities in need, including those impacted by water-related disasters, recognizing that water challenges dramatically affect the quality of life and economic prospects for millions of people around the globe every day.

We appreciate the important role we play in helping our customers meet their own sustainability goals. Our products and solutions allow our customers to transport, treat, and test water more sustainably than in the past. This also enables our customers to realize greater water and energy efficiencies, to have access to more affordable solutions and to build communities that are more resilient against the adverse impacts of climate change.

We pursue a shared value approach that requires business, environmental and social aims to mutually thrive. Our shared value approach is designed to increase economic and social value by:

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Helping our customers solve major water challenges associated with water scarcity, affordability and resilience against the effects of climate change;

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Supporting our customers’ climate mitigation efforts through energy efficient technology and digital solutions;

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Minimizing negative environmental and social impacts across our value chain;

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Using technology and alternative business models that benefit society and the communities in which they are implemented;

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Elevating awareness of global water issues through strategic partnerships; and

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Providing education and access to safe water to enable healthy lives and build resilient communities through our corporate social responsibility program, Xylem Watermark.

Our 2022 Sustainability Report is available on Xylem’s website where you can learn more about our 2025 goals and other important sustainability performance information. Our 2025 Sustainability Goals are aligned with the United Nations Sustainable Development Goals, not only to substantiate our contribution to achieving global objectives but also to underscore our commitment to building a sustainable future.

Each year, we assess and monitor the risks and opportunities related to the impact of climate change on our business. In 2021, we also performed a climate scenario analysis under the Task Force on Climate-related Financial Disclosures framework, and improved Sustainability Accounting Standards Board aligned-disclosures in our Sustainability Report. We also make our Federal Employer Information EEO-1 Report available on our website.

We also drive our sustainability strategy through Xylem Watermark, our corporate social responsibility program, with a mission to provide education and access to safe water and to enable healthy lives, build resilient communities and inspire and attract the next generation of leaders. Watermark also continues to expand its humanitarian disaster response, youth empowerment and skills-based volunteering. We are proud of the program’s expanded strategy to engage a larger ecosystem of stakeholders, as well as the fact that approximately 89% or legacy Xylem colleagues participated in volunteerism activities in 2023. This employee-led volunteerism and broad engagement enhances the Company’s commitment to employee retention, recruiting, and collaboration in the communities in which we live and work.

In 2023, we continued to align our sustainability, operational and financing strategies across our value chain, adding to our suite of green financing tools a new revolving credit facility that ties the facility fees and interest rates to certain sustainability-related key performance indicators. This follows the addition in 2021 of a demand deposit account that links yield on deposits to achievement of certain of our 2025 Sustainability Goals; and our completion in 2020 of a $1 billion Green Bond offering, the proceeds of which were allocated to projects that help improve water accessibility, water affordability and water systems resilience.

Annual Incentive Plan compensation for our President & Chief Executive Officer and senior leadership team was tied to progress on several Sustainability goals, including: advancements in Xylem’s Women in Leadership representation, using merit-based hiring, promotions and diverse candidate slates to attract and retain the most qualified talent; improvement in our injury frequency rate; achievement of 100% process water recycling in certain of our major facilities; and enabling our customers to reduce water demand. Also, further underscoring Xylem’s continued commitment to sustainability, in 2021, the Company augmented its sustainability-linked compensation for all of our named executive officers (“NEOs”), as well as a broader group of executives, with a special, one-time grant of performance share units with goals that are based on five of our 2025 Sustainability Goals.

In 2021, Xylem committed to preliminary science-based targets aligned to limiting global temperature increase to 1.5ºC above pre-industrial level, in line with the Paris Agreement, by 2030 and net zero greenhouse gas (“GHG”) emissions (Scope 1, 2 and 3) before 2050. These goals span across our value chain, and include Scope 1, 2 and 3 emissions. As a result of the acquisition of Evoqua, we are currently aligning our updated baseline emissions and targets. Efforts already underway to reduce our GHG emissions include our 2025 Sustainability Goal to reach 100% renewable energy in our major facilities and our commitment to move towards electric and hybrid vehicles across our global fleet. These actions align with the efforts of our customers to expand access to clean water, sanitation, and efficient use of water with reduced environmental impact. We will provide further updates in our forthcoming 2023 Sustainability Report.

Xylem’s ongoing commitment to sustainability and the results we have achieved have led to our inclusion on several of the world’s most prestigious sustainability equity indexes. In 2023, Xylem continued to benefit from external assessment of our sustainability program through a number of indices to inform on areas for our continued focus.

We are also proud signatories to the following:

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American Business Act on Climate Pledge

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Business Roundtable Pledge

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CDP Climate Change and Water Security

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Charta der Vielfalt (Germany)

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Human Rights Campaign Foundation’s Global Business Coalition

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Human Rights Campaign Foundation’s Business Coalition for the Equality Act

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Time to Vote

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United Nations Global Compact

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United Nations CEO Water Mandate

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United Nations Women’s’ Empowerment Principles

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United Nations (UN75) Uniting Business Statement

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“We Are Still In” Declaration

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World Business Council for Sustainable Development WASH at the Workplace

As a signatory to each of these compacts, pledges and mandates, Xylem is committed to continuous progress against their core elements; this helps us better understand and manage our own opportunities and risks in the environmental and social domains with a focus on long-term value creation.